The UK Government brought in a new State Pension Age system on April 6, 2016.
The new rules apply to those who reach State Pension age on or after April 6, 2016, and include men born on or after April 6, 1951, and women born on or after April 6, 1953.
The previous rules for the Basic State Pension were overly complicated, but the newer system simplifies it, making it easier for individuals to know how much they are likely to receive from a much younger age.
Commenting on the rule change at the time, former minister for pensions Steve Webb said: “The new State Pension will be fairer to the low-paid, the self-employed and carers and make it easier for people to understand what they will get from the State when they reach State Pension age.”
People’s new state pension rate depends on the number of qualifying National Insurance years they’ve contributed through work, looking after children or claiming benefits. The rules may be more simple but many are worried they’ve not gained enough years to qualify for the full-rate of the new State Pension.
This is where Money Saving Expert, Martin Lewis strongly urges those concerned to act now.
In a post on X, Lewis strongly warned: “This is your 6mth warning!
“For each £825 or less you pay to buy National Insurance years, many gain £5,400+, but much closes in April.
“It’s the MOST LUCRATIVE thing many under age 73 can do, some gain £10,000s. The process ain’t quick, so check it now…”
A person looking to receive their full State Pension will need to have roughly 35 qualifying National Insurance (NI) years.
Some may not have this many years for reasons including years spent living abroad, being on low incomes, taking a career break or not claiming credits.
But Mr Lewis reassures those who don’t have enough years that “transitional arrangements let you buy back years to 2006” rather than just the usual backdated six years in previous rules.
He explained that the longer period to backdate was due to end in April 2023, but the deadline was twice extended, “as very heavy demand left phone lines jammed.”
According to Mr Lewis, the last, long extension until April 2025 was to give time for an online system to be built for everyone.
However, he warned: “Now that’s not happening. Some can do it online, but HM Revenue & Customs admits its online tool won’t work for all. Therefore, the over-demand phone risk is back in the deadline run-up, hence this early warning.
A person can add more qualifying years by making voluntary contributions. However, it should be noted that, while purchasing missing National Insurance years to plug gaps may be beneficial for some people, it may not be for others.
People can see if they’d benefit by checking their National Insurance record and state pension forecast on the GOV.UK website.
